OMB Should Collect and Share Lessons Learned from Use of COVID-19-Related Grant Flexibilities (GAO-21-318)
Summary
A GAO report to congressional committees, GAO-21-318, dated March 2021, on grants management. It notes that federal grants to state and local governments totaled $721 billion in fiscal year 2019. GAO reports that in March and April 2020 the Office of Management and Budget (OMB) identified 15 exceptions to government-wide grants management requirements, referred to as flexibilities, that agencies could make available to grantees and applicants. OMB's memorandums stated that they were intended to help grantees address challenges stemming from COVID-19 by reducing administrative burden without compromising accountability. Its title states that OMB should collect and share lessons learned from their use.
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Full text
United States Government Accountability Office
Report to Congressional Committees
GRANTS
March 2021
MANAGEMENT
OMB Should Collect
and Share Lessons
Learned from Use of
COVID-19-Related
Grant Flexibilities
GAO-21-318
March 2021
GRANTS MANAGEMENT
OMB Should Collect and Share Lessons Learned
from Use of COVID-19-Related Grant Flexibilities
Highlights of GAO-21-318, a report to
congressional committees
Why GAO Did This Study What GAO Found
Federal grants to state and local In March and April 2020, the Office of Management and Budget (OMB) identified
governments totaled $721 billion in 15 exceptions to government-wide grants management requirements agencies
fiscal year 2019. OMB has established could make available to grantees and grant applicants. Referred to as flexibilities,
requirements to ensure accountability OMB’s memorandums stated that they were intended to help grantees respond
for such funds. In March 2020, OMB to and address organizational challenges stemming from COVID-19 by reducing
identified flexibilities related to those administrative burden without compromising accountability. OMB rescinded most
requirements to support grantees’
flexibilities in June 2020. All flexibilities expired by the end of December 2020.
response to COVID-19.
The CARES Act includes a provision Examples of Office of Management and Budget-Identified Grant Flexibilities
for GAO to report on its ongoing Flexibility Description
monitoring and oversight efforts related Salaries and other Agencies could allow grantees to continue to charge salaries and benefits
to the COVID-19 pandemic. This report project activities (consistent with grantee pay policies) and other costs necessary to
resume grant activities.
is a part of that body of work and
Financial and other Agencies could allow grantees to submit financial and other reporting up
examines: (1) how selected agencies reporting extensions to 3 months beyond its due date.
made grant flexibilities available, and
how grantees reported using them; (2) Source: Office of Management and Budget. Note: For more detail, see table 1 in GAO-21-318. | GAO-21-318
how OMB and selected agencies The flexibilities were broadly available at the three selected agencies—the
developed and implemented grant Departments of Education, Health and Human Services, and Transportation.
flexibilities; and (3) the extent to which Officials from grantee organizations told GAO that grantees reported using the
OMB has identified lessons learned
flexibilities to address unprecedented operational disruptions related to COVID-
from the use of grant flexibilities.
19, such as having to close offices or laboratories in response to stay-at-home
GAO reviewed documents and orders early in the pandemic. For example, research grantees reported using a
interviewed officials at OMB and three flexibility to continue using federal grant funding to pay the salaries of employees
agencies. GAO selected those unable to work during shutdowns. They reported that this flexibility allowed them
agencies because they account for to retain employees and be prepared to restart grant-funded work when it was
approximately two-thirds of federal safe to do so.
grant spending. GAO also interviewed
officials from 16 organizations OMB and selected agencies leveraged existing grants management processes to
representing grantees. GAO assessed develop and implement the flexibilities in line with relevant internal control
OMB and agencies’ development and standards, such as risk assessment and communication. For example, OMB
implementation of the flexibilities consulted with agencies involved in a government-wide effort to modernize
against relevant internal control grants management policy to identify flexibilities that would strike a balance
standards. GAO also assessed OMB’s between helping grantees respond to the pandemic and maintaining controls
efforts to identify lessons learned against waste, fraud, and abuse of federal grant funds. Offices responsible for
against criteria identified in prior work. grants management policy at each selected agency then issued agency-wide
guidance communicating the available flexibilities and policies and procedures
What GAO Recommends for implementing them.
GAO is making one recommendation
In prior work, GAO has found that collecting and sharing lessons learned from
to OMB to collect and share lessons
learned from the use of grant programs or projects helps organizations share information for improving work
flexibilities. OMB generally agreed with processes and factor beneficial information into future planning. While OMB is
the recommendation. relying on agencies to individually document lessons they learned using the
flexibilities, it has not established a process to collect and share lessons learned
widely across the federal government. Such an effort could help OMB and
agencies understand the extent to which the flexibilities assisted grantees while
maintaining accountability. The COVID-19 pandemic was the third time in recent
View GAO-21-318. For more information,
contact Michelle Sager at (202) 512-6806 or
years that OMB identified flexibilities when crises disrupted grantees’ ability to
sagerm@gao.gov. continue managing their grants as they normally do. Collecting and sharing
lessons learned widely could also help inform future OMB and agency decisions.
United States Government Accountability Office
Contents
Letter 1
Background 4
Grant Flexibilities Were Available across Selected Agencies, and
Grantees Reported Using Them to Continue Implementation
during COVID-19-Related Disruptions 10
OMB and Selected Agencies Leveraged Existing Grants
Management Processes to Develop and Implement Flexibilities 13
OMB Has Not Collected or Shared Lessons Learned from the Use
of COVID-19-Related Grant Flexibilities 21
Conclusions 24
Recommendation for Executive Action 25
Agency Comments 25
Appendix GAO Contact and Staff Acknowledgments 28
Table
Table 1: OMB-Identified Grant Flexibilities for Grantees and Grant
Applicants Related to COVID-19 7
Figures
Figure 1: Start and End Dates for OMB-Identified Grant
Flexibilities 9
Figure 2: Risk Assessment 15
Figure 3: Information and Communication 16
Figure 4: Control Activities 17
Figure 5: Monitoring 19
Page i GAO-21-318 Grant Flexibilities
Abbreviations
CAP cross-agency priority
COVID-19 Coronavirus Disease 2019
DOT Department of Transportation
GPO Grants Policy Office
ECGAP Executive Committee on Grants Administration
Policy
Education Department of Education
HHS Department of Health and Human Services
NOFO Notice of Funding Opportunity
OA operating administration
OAGA Office of Acquisition and Grants Administration
OMB Office of Management and Budget
OSPE Office of the Senior Procurement Executive
SAM System for Award Management
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Page ii GAO-21-318 Grant Flexibilities
Letter
441 G St. N.W.
Washington, DC 20548
March 31, 2021
Congressional Committees
The Coronavirus Disease 2019 (COVID-19) directly affected federal
grantees as they operated with reduced operational capacity in response
to stay-at-home orders and responded to increased costs, such as for
personal protective equipment. In response to these challenges, the
Office of Management and Budget (OMB) issued guidance beginning in
March 2020 that identified temporary exceptions to grants management
requirements federal agencies could make available to their grantees, as
the agencies deemed appropriate and to the extent permitted by law. 1
OMB made most of these exceptions available for between 3 and 5
months, as described below. They have all been rescinded or expired as
of December 2020. 2
As stated in the guidance, OMB intended these exceptions—commonly
referred to as flexibilities—to immediately and temporarily help grantees
respond to, and address, organizational challenges caused by COVID-19
by reducing their administrative burden without compromising
accountability. 3 Grantees could apply flexibilities made available by their
1OMB issued this guidance in a series of four memorandums. See OMB, Administrative
Relief for Recipients and Applicants of Federal Financial Assistance Directly Impacted by
the Novel Coronavirus (COVID-19), M-20-11 (Washington, D.C.: Mar. 9, 2020);
Administrative Relief for Recipients and Applicants of Federal Financial Assistance
Directly Impacted by the Novel Coronavirus (COVID-19) Due to Loss of Operations, M-20-
17 (Washington, D.C.: Mar. 19, 2020); Repurposing Existing Federal Financial Assistance
Programs and Awards to Support the Emergency Response to the Novel Coronavirus
(COVID-19), M-20-20 (Washington, D.C.: Apr. 9, 2020); and Extension of Administrative
Relief for Recipients and Applicants of Federal Financial Assistance Directly Impacted by
the Novel Coronavirus (COVID-19) due to Loss of Operations, M-20-26 (Washington,
D.C.: June 18, 2020).
2More recently, OMB issued additional guidance beyond the scope of this review. See
OMB, Promoting Public Trust in the Federal Government through Effective
Implementation of the American Rescue Plan Act and Stewardship of the Taxpayer
Resources, M-21-20 (Washington, D.C.: Mar. 19, 2021).
3OMB identified flexibilities for use by recipients and applicants of federal financial
assistance. Federal financial assistance comprises grants, cooperative agreements, non-
cash contributions or donations of property, direct appropriations, and food commodities,
among other things. For the purposes of this report, our use of the term grant also
includes other types of federal financial assistance.
Page 1 GAO-21-318 Grant Flexibilities
grantor agencies to requirements for allowable costs, procurement, and
financial and other reporting, among other things.
Federal grants play an important role in funding national priorities,
including health care, transportation, and education. For example,
grantees use federal grant funds to conduct laboratory research on
vaccines, build and maintain roads and mass transit systems, and provide
instruction to improve students’ academic achievement. Federal outlays
for grants to state and local governments totaled $721 billion in fiscal year
2019. 4
Congress and OMB have established a variety of government-wide
grants management requirements intended to ensure accountability and
transparency for this funding. For instance, OMB has established Uniform
Administrative Requirements, Cost Principles, and Audit Requirements
for Federal Awards—commonly referred to as the Uniform Guidance. 5
The Uniform Guidance is intended to provide a government-wide
framework of grants management requirements that simultaneously
reduces the risk of waste, fraud, and abuse of federal grant funds and
administrative burden on grantees while delivering better grant
performance.
The CARES Act includes a provision for us to report on our ongoing
monitoring and oversight efforts related to the COVID-19 pandemic. 6 This
report is a part of our body of work in response to the CARES Act. It
focuses on the federal government’s efforts to support its grantees during
the pandemic. Specifically, in this report we:
• identify how selected agencies made OMB-identified grant flexibilities
available to grantees and applicants, and how grantees reported
using them;
• describe how OMB and selected agencies developed and
implemented grant flexibilities; and
4For additional information, see our key issues page on grants to state and local
governments:
https://www.gao.gov/key_issues/federal_grants_to_state_local_governments/issue_summ
ary.
5Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards, 2 C.F.R. § 200.
6Pub. L. No. 116-136, § 19010, 134 Stat. 281, 579-81 (Mar. 27, 2020).
Page 2 GAO-21-318 Grant Flexibilities
• assess the extent to which OMB has identified lessons learned from
the development and implementation of grant flexibilities.
To address these three objectives, we analyzed agency documents about
the development and implementation of grant flexibilities and interviewed
staff at OMB and three selected agencies: the Departments of Health and
Human Services (HHS), Transportation (DOT), and Education
(Education). We selected these agencies because together they
accounted for approximately two-thirds of federal grant obligations in
fiscal year 2019, the most recent full year for which data were available at
the time we began our review.
We focused our review on actions (1) OMB took at the government-wide
level, and (2) selected agencies took at the departmental level to develop
and implement the grant flexibilities. We did not review the
appropriateness or legality of the use of the flexibilities by any
subcomponents or programs within the selected agencies.
To address the first objective, we reviewed information such as grants
management policies and procedures from the three selected agencies
and identified how each agency made the grant flexibilities available to its
grantees. We also interviewed staff responsible for developing and
implementing OMB’s guidance on grant flexibilities.
In addition, we interviewed relevant officials at 16 organizations
representing different types of federal grantees (e.g., states, localities,
tribes, and research institutions), as well as other associations
representing members that receive or manage federal grants. 7 We
identified these organizations by reviewing our past work on grants
management and asking organization officials for suggestions of other
relevant organizations with whom we should speak. We also reviewed
information from the 16 organizations. We identified the most common
7The grantee organizations we interviewed were the National Association of State Budget
Officers; the Council on Government Relations; the Federal Demonstration Partnership;
the National Association of State Auditors, Comptrollers, and Treasurers; the National
Conference of State Legislatures; the Rhode Island Office of Management and Budget;
the Illinois Office of Management and Budget; the National League of Cities; the Council
of State Governments; the National Association of Counties; the National Grants
Management Association; the Native American Finance Officers Association; the
Association of American Universities; the Association of State and Territorial Health
Officials; the American Public Transportation Association; and the American Public
Human Services Association.
Page 3 GAO-21-318 Grant Flexibilities
COVID-19-related challenges they reported grantees faced, as well as
how grantees used specific flexibilities to address those challenges.
To address the second objective, we reviewed OMB’s and selected
agencies’ efforts to develop and implement the grant flexibilities. We
assessed their efforts against federal standards for internal control. 8 For
this report, we focused on a subset of four internal control standards: (1)
risk assessment; (2) information and communication; (3) control activities;
and (4) monitoring. We used these four internal control standards
because our past work has found that agencies developing guidance—
including on grants management—should apply them to ensure that the
guidance they produce achieves its desired results. 9
To address the third objective, we evaluated OMB’s efforts to identify
lessons learned about the development and implementation of grant
flexibilities against leading practices for lessons learned we have
identified in prior work. 10
We conducted this performance audit from April 2020 to March 2021 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
Background
The Uniform Guidance OMB is responsible for establishing government-wide grants
management policies. 11 In 2013, OMB led an interagency effort to revise
8GAO, Standards for Internal Control in the Federal Government, GAO-14-704G
(Washington, D.C.: September 2014).
9GAO, Regulatory Guidance Processes: Selected Departments Could Strengthen Internal
Control and Dissemination Practices, GAO-15-368 (Washington, D.C.: Apr. 16, 2015).
10GAO, DOD Utilities Privatization: Improved Data Collection and Lessons Learned
Archive Could Help Reduce Time to Award Contracts, GAO-20-104 (Washington, D.C.:
Apr. 2, 2020); Project Management: DOE and NNSA Should Improve Their Lessons
Learned Process for Capital Asset Projects, GAO-19-25 (Washington, D.C.: Dec. 21,
2018); and Federal Real Property Security: Interagency Security Committee Should
Implement a Lessons-Learned Process, GAO-12-901 (Washington, D.C.: Sept. 10, 2012).
1131 U.S.C. § 503(b)(2)(C).
Page 4 GAO-21-318 Grant Flexibilities
and streamline its existing government-wide grants management circulars
into the Uniform Guidance. 12 The Uniform Guidance became effective in
December 2014. Its requirements cover four areas:
• Pre-Award Requirements and Contents of Awards. This area
prescribes instructions that agencies are to follow in executing
program planning, announcement, application, and award processes.
For example, it instructs agencies to provide specific information in
their notifications to the public that grant funding is available, such as
the due dates for applications.
• Post-Award Requirements. This area establishes requirements that
agencies are to impose on non-federal entities during the execution of
the grant. For instance, grant-making agencies must collect financial
information from grantees no more frequently than quarterly but no
less frequently than annually.
• Cost Principles. This area establishes principles for determining the
allowable costs incurred by non-federal entities during the execution
of a grant. For instance, costs must be necessary and reasonable for
the performance of the federal grant.
• Audit Requirements. This area sets forth standards for obtaining
consistency and uniformity among federal agencies in the audit of
non-federal grantees’ expending federal grant funds. For instance, a
non-federal entity must submit its audit report within the earlier of 30
calendar days after receipt of the auditor’s report, or no later than 9
months after the end of the audit period.
The Uniform Guidance provides that OMB will review it at least every 5
years. 13 OMB led an interagency effort to update the Uniform Guidance,
which it finalized in August 2020. 14 As part of this update, OMB
implemented changes to modernize grantee reporting and to encourage
agencies to measure performance in a way that will help improve grant
goals and objectives. For example, based on challenges grantees
reported facing in collecting grant closeout information from sub-grantees
and reporting it to agencies in a timely manner, OMB extended the time
12The Uniform Guidance brought together in a single place government-wide grants
management guidance that had been contained in a series of OMB circulars, including A-
21, A-50, A-87, A-89, A-102, A-110, A-122, and A-133.
132 C.F.R. § 200.109.
1485 Fed. Reg. 49,506 (Aug. 13, 2020), codified at 2 C.F.R. pts 25, 170, 183, 200.
Page 5 GAO-21-318 Grant Flexibilities
frame for grantees to submit closeout reports to federal agencies by 30
days. 15
The Uniform Guidance applies to all federal agencies that make grants to
non-federal entities. 16 Federal agencies must implement its requirements
in codified regulations, with deviations allowed only in circumstances in
which statutes establish different requirements or where differences are
approved by OMB. 17 HHS, DOT, and Education have each established
such regulations. 18
Grant Flexibilities The Uniform Guidance identifies how OMB and federal agencies can
provide grantees with exceptions (commonly referred to as flexibilities)
related to its requirements (the Uniform Guidance uses the term
“exceptions.” 19 Throughout this report, we use the term “flexibilities” as it
is the common usage of that term). OMB can identify exceptions to the
Uniform Guidance for classes of grants or grantees when the exceptions
would not otherwise be prohibited by statue. In addition, agencies can
make exceptions available to individual grantees on a case-by-case basis
except where otherwise required by law or where OMB or other approval
is expressly required. 20
OMB identified a total of 15 flexibilities for grantees and grant applicants
related to COVID-19 in three memorandums it issued in March and April
2020. 21 In the first memorandum, OMB identified flexibilities for use in
cases in which the purpose of the grant was to support continued
research and services necessary to carry out the COVID-19 emergency
response. In the second and third memorandums, OMB expanded the
availability of the flexibilities. For example, in the second memorandum
OMB identified flexibilities for use in cases in which grantees or applicants
15In its August 2020 revision of the Uniform Guidance, OMB increased the number of days
for grantees to submit closeout reports and liquidate all financial obligations from 90 to
120 calendar days. 2 C.F.R. § 200.344.
162 C.F.R. § 200.101(a).
172 C.F.R. § 200.106.
1845 C.F.R § 75; 2 C.F.R. § 1201; and 2 C.F.R. § 3474, respectively.
192 C.F.R. § 200.102.
20Agencies may apply less restrictive requirements under limited circumstances. 2 C.F.R.
§ 200.102(c).
21OMB M-20-11 (Mar. 9, 2020); M-20-17 (Mar. 19, 2020); and M-20-20 (Apr. 9, 2020).
Page 6 GAO-21-318 Grant Flexibilities
were affected by the loss of operational capacity and increased costs due
to COVID-19. Federal agencies could decide to make the flexibilities
available to grantees as they deemed appropriate and to the extent they
were permitted by law. Table 1 identifies the flexibilities OMB identified
across the three memorandums:
Table 1: OMB-Identified Grant Flexibilities for Grantees and Grant Applicants Related to COVID-19
Flexibility Description
Pre-award costs Agencies could allow necessary costs incurred from January 20, 2020, and prior to the grant’s
effective date.
System for Award Management Agencies could relax the requirement for active registration in SAM—required for entities
(SAM) registration waivers receiving grants—at the time of application, as well as extend some deadlines for
recertifications.a
Notice of Funding Opportunity Agencies could publish emergency NOFOs for fewer than 30 days without providing a
(NOFO) publication waivers separate justification for each.
No-cost extensions To the extent permitted by law, agencies could extend periods of performance for selected
expiring grants by up to 1 year.
Non-competitive continuation For grantees requesting continuation of their grant projects, agencies could accept a brief
requests statement of the grantee verifying its ability to resume activities and accept further grant
funding.
Prior approval requirements Agencies could waive the requirement for prior approval of special or unusual costs as
necessary to effectively address the response.
Procurement exemptions Agencies could waive certain procurement requirements, such as taking steps to contract with
small and minority- and women-owned businesses.
Financial and other reporting Agencies could allow grantees to submit financial and other reporting up to 3 months beyond
extensions its due date.
Salaries and other project activities Agencies could allow grantees to continue to charge salaries and benefits (consistent with
grantee pay policies) and other costs necessary to resume grant activities.
Single audit extensions For grants whose purpose is to support research and services necessary to carry out the
emergency response to COVID-19, agencies should allow grantees to submit reports 1 year
beyond the normal due date. Agencies should allow grantees affected by the loss of
operational capacity and increased costs due to COVID-19, and with fiscal year-ends through
June 30, 2020, to submit them 6 months beyond the normal due date.b
Closeout extensions Agencies could allow grantees to delay their submission of reporting required for grant
closeout for up to 1 year after the award expires.
Application deadline flexibility Agencies could provide flexibility for applicants’ submissions of competing applications in
response to specific announcements and unsolicited applications.
Costs not normally chargeable Agencies could allow grantees to charge normally unallowable costs, such as cancelling
events or travel, necessary for pausing and restarting activities.
Indirect cost rate extensions Agencies could allow grantees to use current indirect cost rates for 1 additional year without
submitting a new proposal.
Repurposing grants Agencies could repurpose grants to support the COVID-19 response by allowing grantees to
donate medical equipment purchased under grants to hospitals or labor to support emergency
response if permitted by all legal requirements associated with such funding.
Source: OMB. | GAO-21-318
Page 7 GAO-21-318 Grant Flexibilities
a
In August 2020, OMB permanently revised the SAM registration requirements to allow agencies to
waive the requirement to register when they determine exigent circumstances would prevent an
applicant from registering prior to the submission of an application without needing to request a
waiver from OMB. 2 C.F.R. 25.110(c)(2).
b
OMB used its memorandums to exercise its authority under section 7504(a) and 7505(a) of Title 31,
United States Code, to extend the normal Single Audit reporting deadline set out in section 7502(h) of
Title 31, United States Code. In June 2020, OMB amended and extended this flexibility. It allowed
grantees that had not yet filed single audit reports as of March 19, 2020 that had normal due dates
from March 30, 2020 through June 30, 2020 to delay completion and submission of their reports up to
6 months. In addition, it allowed audits normally due from July 31, 2020, through September 30,
2020, an extension of up to 3 months. OMB-M-20-26 (June 18, 2020). In December 2020, OMB
directed agencies to allow grantees with single audit reports due from October 1, 2020 through June
30, 2021, and that received COVID-19 funding, an extension of up to 3 months for completing and
submitting their reports. OMB, 2 CFR Part 200, Appendix XI Compliance Supplement Addendum,
December 2020.
In June 2020, OMB issued a fourth memorandum that temporarily
extended two of the flexibilities while rescinding the others. 22 Figure 1
identifies the flexibilities that OMB identified in each of its memorandums
and the length of time for which they were available.
22OMB, M-20-26 (June 18, 2020). The memorandum extended the salaries and other
projects flexibility until September 30, 2020, but required agencies to inform grantees to
exhaust other available funding sources in order to preserve federal funds for the ramp-up
effort. It also amended and extended the single audit flexibility. As revised, this flexibility
allowed grantees that had not yet filed single audit reports as of March 19, 2020 that had
normal due dates from March 30, 2020 through June 30, 2020 to delay completion and
submission of their reports up to 6 months. In addition, it allowed audits due from July 31,
2020 through September 30, 2020 a 3-month extension. Single Audit Act, codified, as
amended, at 31 U.S.C. §§ 7501-7506.
Page 8 GAO-21-318 Grant Flexibilities
Figure 1: Start and End Dates for OMB-Identified Grant Flexibilities
The Office of Management and Budget (OMB) issued memorandum M-20-26 on June 18, 2020. That
a
memorandum rescinded the flexibilities in memorandums M-20-17 and M-20-20.
OMB had recently made flexibilities available to help federal grantees
manage their grants during crisis situations on two occasions prior to
2020. It previously made them available for grantees affected by
Hurricanes Katrina and Rita in 2005 and Hurricanes Harvey, Irma, and
Maria in 2017. 23
23OMB, Administrative Relief for Grantees Impacted by Hurricanes Katrina and Rita, Sept.
30, 2005 and Administrative Relief for Grantees Impacted by Hurricanes Harvey, Irma,
and Maria, Oct. 26, 2017.
Page 9 GAO-21-318 Grant Flexibilities
All of the OMB-identified grant flexibilities were available across each of
Grant Flexibilities the selected agencies:
Were Available
DOT issued internal guidance to its operating administrations after
across Selected •
OMB issued each of its first three memorandums notifying them that
Agencies, and the OMB-identified flexibilities were available for them to use as they
deemed appropriate. 24
Grantees Reported
• Education officials told us they considered all of the OMB-identified
Using Them to grant flexibilities available across the department. Education issued
Continue internal guidance to its program offices in April 2020 encouraging the
offices to make all of the flexibilities OMB identified in its second
Implementation memorandum available for the department’s discretionary grants. 25
during COVID-19- However, Education did not allow its program offices to make non-
competitive continuation awards based solely on a grantee’s
Related Disruptions statement verifying its ability to resume activities and accept further
grant funding, as the OMB-identified flexibility allowed. Furthermore,
Education officials told us that that no program offices used the
flexibility allowing for the publication of notices of funding opportunities
for fewer than 30 days.
• HHS issued internal guidance to its operating and staff divisions
making available all of the flexibilities OMB identified in its first two
memorandums. HHS issued similar internal guidance to all HHS
grant-making agencies after OMB issued its third memorandum that
identified limitations on the agencies’ use of the repurposing flexibility
the memorandum contained. Specifically, the guidance alerted HHS
grant-making agencies that they could donate or loan medical
equipment or supplies upon the approval of the Office of the Assistant
Secretary for Financial Resources. However, the divisions could not
donate labor or contract services under the OMB-identified flexibility.
24DOT officials told us that four of the department’s 11 operating administrations used
OMB-identified grant flexibilities—the Federal Railroad Administration, the Federal Transit
Administration, the National Highway Traffic Safety Administration, and the Pipeline and
Hazardous Materials Safety Administration. The other operating administrations
determined that the flexibilities were unnecessary for their grantees’ continued
administration of their grants.
25Education determined that the flexibilities OMB identified in its first memorandum did not
apply to any known Education grantees since they were for use in cases in which the
purpose of the grant was to support continued research and services necessary to carry
out the COVID-19 emergency response.
Page 10 GAO-21-318 Grant Flexibilities
Grantees Reported Using Officials from grantee organizations told us that grantees faced
Flexibilities to Continue unprecedented operational disruptions during the COVID-19 pandemic,
which made it difficult for them to continue implementing their grants.
Implementing Grants and
These disruptions included:
Respond to Other
Challenges Caused by • Shutting down operations temporarily. Grantees temporarily
COVID-19-Related closed locations where they conducted grant work (e.g., offices or
laboratories). Organizations made these closures in response to stay-
Disruptions at-home orders or as a result of their own initiatives to maintain
employee safety.
• Shifting employees to remote work. To maintain the safety of their
workforces, grantees mandated that their telework-ready employees
work remotely during the pandemic. 26
• Rescheduling planned grant work. Grantees were unable to
conduct certain grant activities—such as hosting conferences that
required in-person attendance—as planned, and needed to
reschedule work.
• Supporting medical care and research. Grantees adjusted their
normal grant operations to support medical care and research in
response to the COVID-19 outbreak.
Officials from grantee organizations provided examples of grantees’ use
of specific grant flexibilities to address these disruptions:
• Paying salaries during temporary shutdowns. Officials from an
association that represents research grantees told us that its
members were affected by COVID-19-related temporary shutdowns.
Research grantees conduct a variety of federally-funded research,
such as testing new medical treatments and clean energy
technologies. Although such grantees were able to conduct many
research activities during COVID-19 temporary shutdowns, many had
to cease on-campus research activities. For example, individuals who
conduct hands-on research in laboratories were unable to continue
their work during shutdowns.
Research grantees continued to pay these employees’ salaries with
federal grant funds, using the flexibility that allowed them to do so.
The officials told us that grantees’ ability to continue to pay these
employees’ salaries during shutdowns allowed the grantees to retain
26Officials told us that some employees, such as researchers conducting hands-on
research in laboratories, were unable to work remotely during the pandemic-related
shutdowns.
Page 11 GAO-21-318 Grant Flexibilities
those individuals and be prepared to restart grant work as soon as it
was safe for them to do so.
• Extending single audit deadlines to accommodate remote work.
One state government official said that her state found the flexibility to
extend the submission deadline for single audits to be particularly
valuable. The official said that many state employees transitioned to
remote work at the beginning of the pandemic, at a time of the year
when they normally would be working with auditors to complete the
state’s single audit. However, many of the files needed to complete
auditing within the state are kept on paper. These files were therefore
not accessible to remote workers. The extension of the single audit
deadline allowed the state to delay auditing work until they could
safely access the physical files.
• Extending the grant period of performance to reschedule work.
Officials from an association that represents state governments told
us that their organization also receives grant funding from federal
agencies. They noted that some of the organization’s scheduled 2020
grant activities had to be conducted in person, such as hosting
conferences. The officials said that their organization used the no-cost
extension flexibility to extend grant periods of performance to
accommodate the rescheduling of some of these events for future
dates.
• Repurposing grants to support medical care. Officials from
multiple grantee associations told us that grantees used the flexibility
allowing for the repurposing of grants to support local hospitals’ care
for COVID-19 responders and patients early in the pandemic. For
example, an official from one association told us that grantees
donated personal protective equipment purchased with federal grant
funds to first responders who faced shortages of such equipment.
An official from a second association told us that one of its research
institutions reassigned physicians and nurses supported by federal
research grants to provide clinical care in COVID-19 critical care units.
They said this flexibility provided immense value in caring for COVID-
19 patients. In both cases, the officials told us that grantees worked
closely with federal agencies to ensure that the actions they took
under this flexibility were legally allowable.
Page 12 GAO-21-318 Grant Flexibilities
OMB and Selected
Agencies Leveraged
Existing Grants
Management
Processes to Develop
and Implement
Flexibilities
OMB and Selected OMB leads a cross-agency process for establishing government-wide
Agencies’ Processes for grants management policies. Each of the selected agencies have
centralized processes for developing and overseeing implementation of
Developing and
government-wide and agency-specific grants management policies
Implementing Grants across their organizations.
Management Policies
In March 2018, the administration established the Results-Oriented
Accountability for Grants cross-agency priority (CAP) goal as part of the
President’s Management Agenda. 27 The goal seeks to modernize
government-wide grants management policy so that grants managers
spend less time monitoring compliance and more time focusing on
improving grant results. OMB co-leads the goal with officials from large
grant-making agencies. They report to the Chief Financial Officers
Council. 28 OMB led its 2020 update of the Uniform Guidance as one of
the goal’s major efforts to help agencies better achieve grant program
goals and objectives.
These are the selected agencies’ processes for developing and
overseeing implementation of grants management policies across their
agencies:
27OMB is to coordinate with agencies to develop priority goals for the federal
government—commonly referred to as cross-agency priority goals. The goals are to be
published on the federal government’s performance website concurrently with the
President’s Budget in the second year of the presidential term. 31 U.S.C. § 1120.
28The Chief Financial Officers Council is composed of the Chief Financial Officers
appointed under section 901 of Title 31, United States Code, the OMB Deputy Director for
Management, the OMB Controller of the Office of Federal Financial Management, and the
Fiscal Assistant Secretary of Treasury. The council works to improve financial
management in the U.S. government. 31 U.S.C. § 901 note.
Page 13 GAO-21-318 Grant Flexibilities
• Education: Education has two department-level offices responsible
for grants management that work with other program offices within the
department that are directly responsible for making grant awards. The
Grants Policy Office (GPO) in the Office of Planning, Evaluation and
Policy Development works with offices across the department to
strengthen the connection between the Secretary’s priorities and grant
implementation throughout the process, from design through
evaluation. The Office of Acquisition and Grants Administration
(OAGA) in the Office of Finance and Operations develops, manages,
and provides grants management policy guidance for, as well as
oversight throughout, the department’s formula and discretionary
grant process. The department’s grants policies and guidance are
codified in department-level handbooks for discretionary and formula
grants, which includes how departmental offices apply the Uniform
Guidance.
• HHS: The Office of Grants develops and oversees implementation of
the department’s grants management policies and regulations,
including its implementation of the Uniform Guidance. It publishes
HHS’s Grants Policy Administration Manual, which provides guidance
for how the department’s operating and staff divisions should apply
the Uniform Guidance’s requirements, as well as other statutory and
administrative requirements.
• DOT: The Office of the Senior Procurement Executive (OSPE)
oversees the department’s grants management policies and
procedures. OSPE’s Financial Assistance Policy and Oversight
Division produces the Guide to Financial Assistance, which identifies
policies and procedures intended to ensure DOT’s subcomponents’
consistent application of the Uniform Guidance’s requirements and
principles, along with other statutory, government-wide, and
department grants management requirements.
OMB and Selected OMB and the selected agencies leveraged existing grants management
Agencies Leveraged processes at both the government-wide and agency levels to develop and
implement the flexibilities aligned with relevant internal control standards.
Grants Management
Our past work has found that agency officials developing guidance—
Processes to Develop and including on aspects of grants management—should apply internal
Implement Flexibilities control standards to ensure that the guidance they produce achieves its
desired result. 29 Those standards include risk assessment,
29GAO-15-368.
Page 14 GAO-21-318 Grant Flexibilities
communication, control activities (i.e., policies and procedures), and
monitoring.
Figure 2: Risk Assessment
OMB staff told us that in developing flexibilities they had to assess how to
identify flexibilities that would assist grantees in responding to the
pandemic by reducing their burden while maintaining controls against
waste, fraud, and abuse of federal grant funds. OMB used the Results-
Oriented Accountability for Grants CAP goal management process to
consult with agencies on flexibilities that would meet that trade-off. For
example, OMB staff told us that they consulted with the other leaders of
the CAP goal—HHS; the Departments of Justice, Labor, and State; and
the National Science Foundation—through conference calls and emails in
mid-March 2020 about flexibilities that should be included in its second
memorandum for use in cases where grantees were affected by the loss
of operational capacity and increased costs due to COVID-19.
Actions that the selected agencies took to assess risks in implementing
the OMB-identified flexibilities include:
• Education: According to Education officials, after the COVID-19
pandemic began, Education formed a Grants Policy Cross-Cutting
Issues Group to discuss risks the department’s grantees faced as
they continued to implement grant programs during the pandemic.
The group included officials from GPO, OAGA, the Office of the
General Counsel, and each program office. Officials told us that their
work included identifying risks the OMB-identified grant flexibilities
might pose for the department and its grantees. For example,
Education determined that implementing the non-competitive
continuation request flexibility as identified by OMB could increase
risk that Education would improperly extend grants for grantees that
were not meeting expected performance. The officials subsequently
identified specific policies and procedures intended to mitigate risks
they identified.
Page 15 GAO-21-318 Grant Flexibilities
• HHS: Officials from the Office of Grants told us that after OMB
identified the flexibilities their office assessed risks that could result
from HHS grantees’ use of them. They told us that they identified
several ways in which HHS grantees’ use of the flexibilities could
heighten risk of waste, fraud, or abuse of grant funding. For example,
after OMB identified the repurposing flexibility in M-20-20, Office of
Grants officials grew concerned that many HHS grant programs would
be statutorily prohibited from the repurposing of labor and contract
services. Therefore, the Office of Grants decided it would be risky to
make the flexibility fully available across the department, and did not
do so. HHS made the flexibility available with certain restrictions.
• DOT: OSPE officials told us that they sought to confirm that DOT’s
operating administrations (OA) made flexibilities available within the
parameters OMB established in its memorandums to mitigate the risk
that the OAs would make them available improperly. To do so, the
Senior Procurement Executive met with individuals responsible for
grants management within the OAs to discuss implementation of the
flexibilities. Officials told us that through these conversations they
determined that the OAs were prepared to implement the flexibilities
properly.
Figure 3: Information and Communication
OMB documented the flexibilities in memorandums that it distributed to
the heads of federal agencies and posted on its publicly accessible
website. In addition, OMB leveraged the Results-Oriented Accountability
for Grants CAP goal’s management process to further communicate
information about the flexibilities across the federal government and to
key external stakeholders. OMB presented on, discussed, and answered
questions about the flexibilities at two Grant Innovation Exchange
sessions it held in late March 2020. OMB conducts these sessions under
the CAP goal’s aegis and intends them to bring together members of the
grants management community—including representatives from federal
agencies; state, local, and tribal governments; institutions of higher
Page 16 GAO-21-318 Grant Flexibilities
education; and nonprofit organizations—to discuss new ideas in grants
management.
Actions the selected agencies took to communicate information about the
flexibilities they made available internally and externally include:
• Education: GPO, OAGA, and other offices developed guidance for
program offices to implement the flexibilities through grants bulletins.
GPO developed grant principles aligned with the Secretary’s policies
for discussion across the agency, and OAGA used those principles to
draft the grant bulletins. Officials said that the grant bulletins were
internally distributed and discussed with grant-making offices. The
grant bulletins also directed program offices to provide external
guidance to grantees on the flexibilities. Officials told us that GPO,
OAGA, and other offices shared responsibility in developing and
providing publicly-available fact sheets related to the flexibilities on
Education’s website.
• HHS: The Office of Grants issued internal guidance to HHS’s
subcomponents on implementing the flexibilities OMB identified in M-
20-11, M-20-17, M-20-20, and M-20-26. In that guidance, the Office of
Grants directed the subcomponents to communicate allowable
flexibilities to their grantees along with policies and procedures for
mitigating risks associated with their use.
• DOT: OSPE’s Financial Assistance Policy and Oversight Division
issued guidance on the flexibilities to the department’s
subcomponents through a series of Financial Assistance Policy
Letters. OSPE uses such letters to communicate grants management
policies and procedures requiring prompt implementation to the grants
workforce across the department. The letters identified the flexibilities
OMB identified and policies and procedures subcomponents should
follow in making them available. The letters also directed
subcomponents to post information about the flexibilities they made
available on their websites.
Figure 4: Control Activities
Page 17 GAO-21-318 Grant Flexibilities
OMB established and communicated in its memorandums policies and
procedures intended to address identified risks related to the flexibilities,
such as the need to prevent waste, fraud, and abuse in grant spending.
For example, OMB directed agencies to require their grantees that used
the flexibility to charge salaries and other project activities to maintain
records and documentation to support those charges. OMB staff told us
that during their consultations with Results-Oriented Accountability for
Grants CAP goal participants, agency officials requested such policies
and procedures be added to the memorandums to ensure that grantees
maintain accountability for their use of federal grant funds.
Actions the three selected agencies took to establish and communicate
policies and procedures for managing risks related to the flexibilities
include:
• Education: The grant bulletins identified policies and procedures for
mitigating risks associated with the flexibilities that Education’s
program offices should follow in making them available to their
grantees. In general, the bulletins directed program offices
considering using flexibilities to consult with Education’s Office of the
General Counsel or their program attorneys. In one specific instance,
a bulletin prohibited program offices from making non-competitive
continuation awards based solely on a brief statement from grantees,
as allowed by one of OMB’s flexibilities. Education’s grants policies
indicate that program offices must ensure that grantees seeking a
non-competitive continuation award submit an annual performance
report that addresses whether the status of a funded project is aligned
with the scope and objectives established in the approved application.
The bulletin required program offices to continue the regular practice
of collecting and reviewing annual performance reports from all
grantees seeking non-competitive continuation awards, even if those
reports had to be streamlined as a result of COVID-19. However,
Education used its existing authority to make some portions of
existing performance reports optional, as appropriate, if grantees did
not have data available. This was intended to ensure that non-
competitive continuation awards were made only to grantees in a
position to continue meeting expected performance. The bulletin
directed program offices that they could grant non-competitive
continuation awards to grantees that experienced performance issues
during the COVID-19 crisis, but that those issues should be
addressed with updated conditions covering the continuation grant.
Page 18 GAO-21-318 Grant Flexibilities
• HHS: In the internal guidance it issued to HHS’s subcomponents, the
Office of Grants described policies and procedures the
subcomponents should implement to mitigate the risks associated
with the use of the flexibilities, such as potential waste, fraud, and
abuse of grant funds. The guidance directed HHS’s subcomponents
to consult with internal offices, including the Office of General Counsel
or program counsel, as they considered providing administrative relief
to grantees. In addition, the guidance directed subcomponents to
ensure that any grantees that used the flexibilities allowing for the
charging of salaries or other project activities or normally unallowable
costs maintain appropriate records and cost documentation to
substantiate those charges.
• DOT: OSPE’s Financial Assistance Policy and Oversight Division
established and communicated policies and procedures DOT
subcomponents should adopt to mitigate against potential risks when
making flexibilities available. For example, OSPE’s guidance directed
DOT subcomponents to consult the Office of the General Counsel or
their Offices of Chief Counsel before determining whether a flexibility
could be applied to a grant award. This was intended to ensure that
the use of any flexibility made available aligned with statutory
requirements. In addition, the guidance directed DOT subcomponents
to maintain appropriate records and documentation to support
charges made based on the flexibilities allowing the charging salaries
and other project activities and normally unallowable costs.
Figure 5: Monitoring
OMB staff told us they leveraged the Results-Oriented Accountability for
Grants CAP goal’s management structure to monitor implementation of
the flexibilities and assist federal agencies and grantees. For example,
OMB staff told us they provided input on CAP goal participants’
implementation of the flexibilities by commenting on those agencies’ draft
guidance for implementing the flexibilities prior to publication. In addition,
OMB asked agencies or grantees with questions about implementation to
submit questions to an email address overseen by OMB’s Office of
Federal Financial Management Grants Team. OMB staff told us that
Page 19 GAO-21-318 Grant Flexibilities
common submissions to the email address included questions about the
single audit process and indirect cost rates.
Actions the three selected agencies took to monitor the implementation of
the flexibilities include:
• Education: Officials told us that in the early weeks of the pandemic,
the Office of the General Counsel and Office of the Secretary worked
with Assistant Secretaries to facilitate consistent use of the flexibilities.
GPO later convened weekly cross-agency meetings to discuss the
application of the flexibilities and other cross-cutting policy issues.
These cross-agency meetings included representatives from the
Office of the General Counsel and, according to Education officials, all
grant-making offices, such as the Office of Career, Technical, and
Adult Education.
• HHS: The Office of Grants used regular meetings of HHS’s Executive
Committee on Grants Administration Policy (ECGAP) to monitor the
use of flexibilities across the department. ECGAP is a department-
wide forum of senior officials designed to facilitate the exchange of
information on, and make recommendations related to, grants
management issues. It is chaired by the Deputy Assistant Secretary
for Grants and includes the directors of the two component offices of
the Office of Grants, as well as representatives from various HHS
subcomponents. ECGAP members and other HHS participants used
the meetings in spring and summer 2020 to discuss a range of
COVID-19-related issues, including the flexibilities. Grants managers
across HHS attended these meetings. According to HHS officials,
they had the opportunity to ask questions about and provide feedback
on the flexibilities.
• DOT: OSPE leveraged existing mechanisms to monitor
implementation of the flexibilities across the department. For example,
participants in DOT’s monthly Strategic Acquisition Council meetings,
which include grants management topics, discussed implementation
of the flexibilities. OSPE officials said that participants had the
opportunity to ask questions or seek assistance on implementing the
flexibilities during these meetings.
Page 20 GAO-21-318 Grant Flexibilities
In prior work, we found that the collecting and sharing of lessons learned
OMB Has Not from previous programs or projects provides organizations with a
Collected or Shared powerful method for sharing ideas for improving work processes. 30 In
particular, we found that collecting and sharing lessons learned from an
Lessons Learned interagency effort is valuable since one agency can share lessons it has
from the Use of learned with other agencies that may benefit from the information. 31
COVID-19-Related Furthermore, organizations that identify and apply lessons learned can
ensure they factor beneficial information into planning for future efforts
Grant Flexibilities and limit the chance of the recurrence of challenges that can be
anticipated in advance. 32
In September 2020, OMB staff told us that they had not established a
process to collect lessons learned about agencies’ and grantees’ use of
the flexibilities. OMB staff told us that they had not done so because OMB
is relying on agencies to individually document lessons they and their
grantees learned about their use of the flexibilities in light of the
flexibilities’ effect on their grant programs’ performance and objectives
during the pandemic.
OMB staff told us that OMB and leaders of the Results-Oriented
Accountability for Grants CAP goal discussed the use of grant flexibilities
during the COVID-19 pandemic at a meeting in January 2021—after all of
the flexibilities OMB identified had been rescinded or expired. OMB staff
told us that they used this meeting to consult with the CAP goal leaders
on their assessment of the use and efficiency of the flexibilities. They said
that OMB and the goal leaders determined that the flexibilities helped
agencies and their grantees to mobilize quickly in a crisis.
The COVID-19 pandemic was the third time in recent years that OMB
made flexibilities broadly available to grantees affected by a crisis,
30GAO-20-104; GAO-19-25; and GAO-12-901.
31GAO-12-901.
32We have previously reported on actions Congress and OMB have taken to strengthen
agencies’ use of evidence about whether federal programs and activities achieve intended
results in planning future efforts. For example, the Foundations for Evidence-Based
Policymaking Act of 2018 requires major federal agencies to develop learning agendas. In
its guidance to agencies on developing learning agendas, OMB states that agencies
should identify key questions related to their programs, policies, and regulations, such as
grants management procedures, and strategies for building evidence to answer them.
OMB’s guidance strongly encourages all federal agencies to develop learning agendas.
See: GAO, Evidence-Based Policymaking: Selected Agencies Coordinate Activities, but
Could Enhance Collaboration, GAO-20-119 (Washington, D.C.: Dec. 4, 2019).
Page 21 GAO-21-318 Grant Flexibilities
following their use after hurricanes in 2005 and 2017. Officials from
grantee associations told us that grantees found the flexibilities very
helpful for continuing to manage their grants during the unprecedented
disruptions they faced as a result of the pandemic.
Collecting and sharing agencies’ lessons learned about the recent use of
grant flexibilities across the federal government could help OMB and
agencies understand the extent to which the flexibilities achieved their
objectives. This understanding, in turn, could help OMB and agencies
ensure that they integrate beneficial information into their planning for the
flexibilities’ future use.
Specifically, by collecting and widely sharing lessons learned, OMB and
agencies could better understand (1) additional flexibilities that could be
helpful; (2) ways to reduce grantees’ administrative burden; and (3) the
effectiveness of policies and procedures designed to maintain
accountability for federal grant funds.
Understanding additional flexibilities that could be helpful. Officials
from selected agencies told us that they worked with their grantees early
in the pandemic to identify flexibilities additional to those that OMB
identified in its first two memorandums that could help grantees respond
to and address organizational effects resulting from COVID-19. For
example, Education officials told us that its Office of Career, Technical,
and Adult Education heard from grantees in March 2020 that the grantees
wanted to be able to loan or donate personal protective equipment and
other medical supplies to health care providers to address critical
shortages at the beginning of the pandemic. They told us that Education
has the authority to approve such requests on a case-by-case basis, but
that they asked OMB to identify a broadly available flexibility that would
streamline the process for grantees. OMB made such a flexibility broadly
available in its third memorandum in mid-April. Officials from multiple
grantee associations told us that grantees found this flexibility helpful in
responding to the pandemic.
Collecting and sharing these lessons learned regarding how agencies
worked with their grant-making offices and grantees could help OMB and
agencies identify the flexibilities that agencies and their grantees found
most helpful in responding to and addressing organizational challenges
caused by COVID-19.
For example, OMB, in its first two memorandums, reminded agencies that
in addition to using the flexibilities identified, they could make other
Page 22 GAO-21-318 Grant Flexibilities
flexibilities available to their grantees on a case-by-case basis. Collecting
information about flexibilities agencies granted on a case-by-case basis
could help agencies across the federal government understand how they
could use similar flexibilities in the future, if appropriate. OMB could also
use information about agencies’ use of case-by-case flexibilities to
consider whether it would be appropriate to expand any such flexibilities
into broadly available flexibilities in the future.
Understanding ways to reduce grantees’ administrative burden.
Officials from grantee associations told us that the manner in which
agencies made flexibilities available affected the extent to which grantees
experienced reduced administrative burden. For example, an official from
a research institution that receives federal grant funding said that one
subcomponent of a federal agency allowed grantees to automatically
apply no-cost extensions and extend their grants’ periods of performance
when needed, in accordance with OMB’s language.
However, the official said that another subcomponent of the same agency
required grantees seeking no-cost extensions to apply for each one
individually. The official said that this approach, especially for grantees
receiving many grants from the federal government, may have actually
increased grantees’ administrative burden. Officials from grantee
organizations told us that, generally, grantees’ administrative burdens
could be reduced if more agencies made flexibilities available in a similar
manner so that grantees could apply them automatically.
Collecting and sharing these lessons regarding how agencies
implemented the flexibilities to reduce grantees’ administrative burdens
could help OMB and agencies understand which approaches achieved
the intended purpose. This information could then help OMB and
agencies ensure that if they make the flexibilities available in the future,
they implement them in a way that effectively reduces grantees’
administrative burden.
Understanding the effectiveness of policies and procedures
designed to maintain accountability. OMB and selected agencies
designed and communicated a range of policies and procedures for
implementing the flexibilities that were intended to maintain accountability
for the use of federal grant funds. For example, as described above, OMB
directed agencies that made the salaries and other project activities
flexibility available to require grantees that used it to maintain appropriate
records and cost documentation to support its use. Each of the selected
Page 23 GAO-21-318 Grant Flexibilities
agencies subsequently directed their subcomponent agencies to
implement that requirement.
Officials from two selected agencies said that it was too soon for them to
determine whether or not implementation of the grant flexibilities poses
risks to accountability for the use of grant funds. 33 Collecting and sharing
information regarding these aspects of accountability after agencies have
collected the relevant information could help OMB and agencies
understand the effectiveness of these policies and procedures. Such an
understanding, in turn, could allow OMB and agencies to identify needed
adjustments to accountability-related policies and procedures if OMB
makes flexibilities available in the future. OMB and agencies could then
ensure that they are most effectively balancing assistance for grantees
with the imperative to prevent waste, fraud, and abuse of federal funds.
OMB intended the COVID-19-related grant flexibilities to help grantees
Conclusions respond to, and address, organizational challenges stemming from the
pandemic by reducing their administrative burden without compromising
accountability. In developing and implementing the flexibilities, OMB and
the selected agencies used existing grants management processes to
balance assisting grantees in responding to the pandemic while
maintaining controls against waste, fraud, and abuse of federal grant
funds.
Organizations that collect and share lessons that they have learned from
implementing their programs and projects can improve their planning for
future efforts. However, OMB has neither collected nor widely shared
lessons learned from agencies’ use of the COVID-19-related grant
flexibilities.
The COVID-19 pandemic marked the third time recently OMB made use
of grant flexibilities to help federal grantees manage grants through
crises. By collecting and sharing lessons learned from agencies’ use of
33For example, OMB made the flexibilities in its second and third memorandums available
in March and April 2020, respectively. It rescinded most of them in its fourth memorandum
in June 2020. Therefore, grantees with fiscal years ending on June 30, 2020 required to
have an audit of their federal grant expenditures conducted, and that used those
flexibilities, such as those for salaries or other project activities or donating medical
equipment, would normally be required to submit a single audit report for the period in
which they used the flexibilities no later than March 31, 2021. If such a grantee received
COVID-19 funding and used a single audit extension made available in OMB’s December
2020 2 CFR Part 200, Appendix XI Compliance Supplement Addendum, it could submit its
single audit report later than March 31, 2021.
Page 24 GAO-21-318 Grant Flexibilities
COVID-19-related grant flexibilities, OMB and agencies can ensure that
they understand the extent to which, and how, COVID-19-related
flexibilities could be applied in the future as they balance consideration of
flexibilities with the need to protect federal funds from waste, fraud, and
abuse.
The Director of OMB should collect and share across the federal
Recommendation for government lessons agencies learned regarding the use of COVID-19-
Executive Action related grant flexibilities.
We requested comments on a draft of this product from OMB and the
Agency Comments three selected agencies—Education, HHS, and DOT.
and Our Evaluation
OMB responded by email that it generally agreed with the
recommendation we directed to it to collect and share lessons agencies
learned regarding the use of COVID-19-related grant flexibilities.
In addition, Education and HHS provided technical comments, which we
incorporated as appropriate. DOT responded by email that it had no
comments.
We are sending copies of this report to the appropriate congressional
committees, the Acting Director of the Office of Management and Budget,
the Secretary of the Department of Education, the Secretary of the
Department of Health and Human Services, the Secretary of the
Department of Transportation, and other interested parties. In addition,
the report is available at no charge on the GAO website at
http://www.gao.gov.
If you or your staff have any questions about this report, please contact
me at (202) 512-6806 or sagerm@gao.gov. Contact points for our Offices
of Congressional Relations and Public Affairs may be found on the last
page of this report. GAO staff who made key contributions to this report
are listed in the appendix.
Michelle Sager
Director, Strategic Issues
Page 25 GAO-21-318 Grant Flexibilities
List of Committees
The Honorable Patrick Leahy
Chairman
The Honorable Richard Shelby
Vice Chairman
Committee on Appropriations
United States Senate
The Honorable Ron Wyden
Chairman
The Honorable Mike Crapo
Ranking Member
Committee on Finance
United States Senate
The Honorable Patty Murray
Chair
The Honorable Richard Burr
Ranking Member
Committee on Health, Education, Labor, and Pensions
United States Senate
The Honorable Gary C. Peters
Chair
The Honorable Rob Portman
Ranking Member
Committee on Homeland Security and Governmental Affairs
United States Senate
The Honorable Rosa L. DeLauro
Chairwoman
The Honorable Kay Granger
Ranking Member
Committee on Appropriations
House of Representatives
The Honorable Frank Pallone, Jr.
Chair
The Honorable Cathy McMorris Rodgers
Republican Leader
Committee on Energy and Commerce
House of Representatives
Page 26 GAO-21-318 Grant Flexibilities
The Honorable Bennie G. Thompson
Chair
The Honorable John Katko
Ranking Member
Committee on Homeland Security
House of Representatives
The Honorable Carolyn B. Maloney
Chairwoman
The Honorable James Comer
Ranking Member
Committee on Oversight and Reform
House of Representatives
The Honorable Richard Neal
Chair
The Honorable Kevin Brady
Republican Leader
Committee on Ways and Means
House of Representatives
Page 27 GAO-21-318 Grant Flexibilities
Appendix: GAO Contact and Staff
Appendix: GAO Contact and Staff
Acknowledgments
Acknowledgments
Michelle Sager, (202) 512-6806 or sagerm@gao.gov
GAO Contact
In addition to the above contact, Tom James (Assistant Director) and
Staff Daniel Webb (Analyst-in-Charge) supervised this review and the
Acknowledgments development of the resulting report. Capri Backus and Jessica Walker
made significant contributions to this report. In addition, Karin Fangman,
Samantha Lalisan, Rudy Chatlos, and Amy Konstas made key
contributions. Ann Czapiewski developed the graphics for this report.
Jeffrey DeMarco, Barbara Lancaster, Maya Chakko, Daniel Paulk, and
Ralanda Sasser verified the information presented in this report.
(104287)
Page 28 GAO-21-318 Grant Flexibilities
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